In Tennessee v. FCC, (1) the Sixth Circuit Court of Appeals invalidated the FCC's 2015 order preempting laws in Tennessee and North Carolina restricting the expansion of municipal broadband. (2) The court found that Section 706 of Telecommunications Act of 1996 fell short of the clear statement that is required to preempt the allocation of power between the states and its subdivisions. (3)
This case concerns municipal broadband--specifically, whether, contrary to state law, municipalities that provide broadband internet service can expand to cover underserved areas that lie outside of their coverage area. (4) The state legislatures of Tennessee and North Carolina thought statute answered this question when they enacted laws that restricted the expansion of municipal broadband to these underserved areas. (5)
Tennessee enacted a law in 1999 which authorized municipalities operating an electric plant to offer internet services. (6) Sec. 601 of the law limited the area in which municipalities may provide internet services to only "within its service area." (7) This prevented a municipality from offering broadband services to surrounding areas not within its service area. (8) At the time, there was no FCC rule or regulation that required municipalities to offer broadband services outside of its coverage area. (9)
Eventually, developments in technology led to municipalities providing high speed, reliable broadband service. (10) The city of Chattanooga, Tennessee began offering high-speed broadband internet services through its' municipal electric provider. (11) Chattanooga developed a fiber-optic communication infrastructure, and became the first broadband provider in the nation to offer Gigabit services to all of its customers. (12) According to the FCC's findings, Chattanooga's municipal broadband service is a success, providing added revenue to the city, leading to job growth, and lowering rates and increasing services among broadband providers. (13) Despite this, Sec. 601 of Tennessee's municipal broadband law prevented Chattanooga from expanding the service beyond its service area to underserved areas. (14)
North Carolina enacted its own municipal broadband restrictions in 2011, limiting city-owned communications service providers to provide service only within their municipal boundaries. (15) The law also places additional restrictions on municipal broadband providers by forcing them to make payments in lieu of taxes and...